MNRE has been working towards supporting biomass-based cogeneration projects in the country and had introduced a scheme for the same in May 2018. The scheme provides CFA of INR 25 Lakhs/MW for bagasse cogeneration projects and INR 50 Lakh/MW for non-bagasse cogeneration projects.

Recently MNRE has made two amendments in clause 5 & 6 of the scheme to provide more financial support to the projects. The changes are as follows:

Apart from this, The Madhya Pradesh Electricity Regulatory Commission (MPERC) has rejected two petitions filed by owners of bagasse-based cogeneration projects against the imposition of cross-subsidy surcharge for self-consumption of power in Madhya Pradesh.

The petitioners Shri Durga Khandsari Sugar Mills and Narmada Sugar Private Limited had approached MPERC to not impose cross-subsidy on self-consumption of the electricity from its own bagasse-based cogenerating stations. However, both the plaintiffs were selling the majority of its generated electricty via open access and less than 51% was being self-consumed. Hence, the commission was of the opinion that whole power supplied by the cogeneration plants of the petitioners will be treated as if the power is supplied by a generating company.

MNRE has also invited an Expression of Interest (EOI) for tapping the potential of biomass and bagasse co-generation in the country as of October 2018, to promote the source of energy.

The Assam Electricity Regulatory Commission (AERC) in an order dated 31st March released tariff for FY 2017-18 for the Assam Power Distribution Corporation Limited (APDCL). The change in energy charge from last year to this year has been depicted in the following table:

The tariff has increased since the last year specially for HT II industries and commercial users for who the tariff has increased significantly. There has been an increase in the CSS as well this year.

Karnataka Electricity Regulatory Commission in its order dated 11th April, 2017, has approved the retail supply tariff for 2017-18. The tariff hike proposed by the KERC for industrial and commercial consumers and a comparison of the existing and the new tariff proposed by the commission can be seen as follows:

The table below represents the cross subsidy charges worked out as per the different consumer category:

Rajasthan Electricity Regulatory Commission (RERC) has calculated the Cross subsidy surcharge to be applicable during FY 16-17. The new CSS will be applicable only for the state of Rajasthan effective till 31st March, 2017. The new CSS applicable will have significant impact on the open access power market.

The table below depicts the CSS charges defined for year FY 2016-17:

The graph below depicts the % change in the CSS over the last four years:

A recent article in Business Standard highlighted the disproportionate rise of cross-subsidy surcharge (CSS) in many states. We have been tracking this issue as well and had highlighted the problem in our blog & NL Volume 62.

In the past, CSS has been calculated on the basis of the cost of the marginal 5% (in other words the most expensive 5%) of power procured by the state. This results in a bias towards the highest cost paid, resulting in high CSS. The National tariff policy (NTP) has suggested change in this methodology to a weighted average cost model, and also proposed that CSS be restricted to 20% of the tariff. However, recent increases show that states have largely ignored the provisions of the NTP.

A big reason for the rise in CSS is also the fact that states continue to shy away from raising tariffs for domestic, agricultural and such categories. According to the Business Standard article, States like Chhattisgarh, UP, Uttarakhand and Bihar have already come up with their tariff orders for the financial year 2016-17, but have not raised retail tariffs. Only Gujarat has allowed a retail tariff increase.

With increasing cost of power the burden to foot the bill therefore falls on industrial and commercial consumers. As per the MoP data the below graph depicts change in CSS over the span of 1 year in the major states which varies from 35% to 321%.

Telangana recently came up with its net metering regulation for connectivity with the Grid and sale of electricity from the Rooftop Solar Photovoltaic. This Regulation will be applicable to the distribution licensee, an eligible consumer and a third party owner of a Roof Top Solar PV System in the state of Telangana.

Following are some of the highlights of the regulations:

An eligible consumer shall install the grid connected Rooftop Solar PV System of the rated capacity as specified in this Regulation.

The tariff payable to an eligible consumer under the net-metering shall be the average power purchase cost of a Distribution Licensee.

The net metering facility, as far as possible, of an eligible consumer shall be in three phase service.

A single phase consumer is also eligible for net metering up to 3 KW.

The capacity of a Rooftop Solar PV System to be installed at the premises of an eligible consumer shall not be less than one Kilo Watt peak (1kWp) and a maximum of One (1) MWp.

The quantum of electricity consumed by an Eligible Consumer from the Rooftop Solar PV System under the Net Metering Arrangement shall qualify towards his compliance of Solar RPPO, if such Consumer is an Obligated Entity.

The quantum of electricity consumed by the Eligible Consumer from the Rooftop Solar PV System under the Net Metering arrangement shall, if such Consumer is not an Obligated Entity, qualify towards meeting the Solar RPPO of the Distribution Licensee.

The unadjusted surplus Units of the solar energy purchased by the Distribution Licensee under the provisions of sub-Para 10.3 shall qualify towards meeting its Solar RPPO.